Reads from last week

Posted by Bruce Mc on Sep 12, 2010 in Week in review | 0 comments

NEVER FORGET!

10 Things Grads Should Know About Retirement Planning - 

Brought to my attention via email from the author, this is great information for people who are just getting started. Too many people in their 20s simply don’t know the first thing about retirement planning or smart spending, and it’s because they’re too focused on earning money now to think about what they’ll need later. If you’re in that boat, don’t worry: it’s not too late to change course. With a few tips, you’ll be able to start planning for the day when you won’t have to work anymore.

(Planning For Retirement, Improving Your Retirement, Retirement calculators.)

Homebuyer tax credit payback chaos? – “You all do remember that when it was created, the so-called credit was really just an interest-free federal loan, don’t you? And loans, despite what some homeowners think, must be paid back.

But I’ll guarantee that this coming tax-filing season, affected taxpayers and the IRS are going to be spending a lot more time making sure that the first-time homebuyer credit repayment rules are met.”

Not exactly last week but a missed post that needs mention:

10 Ways To Get Out Of Debt Starting Now – Debt is as American as apple pie. It is estimated that 80% of Americans live with debt and that includes $8 trillion in home mortgage debt.  Many of us go to work every day simply to pay for products or services that we’ve already received. We can’t help our children with college, fund our retirements, participate in charitable giving, or simply go on that dream vacation we’ve always dreamed of.

Sometimes a Little Boost Is All You Need

Homebuyer Tax “Surprise” Just a Figment of the Media’s Imagination –  they shouldn’t be. They knew exactly what they were getting into. They may not have liked it after the fact but they can’t say they didn’t know. Time is coming that the first round to start paying back is getting near.

Social Media’s Not For You. Or Is It? It should be if you plan on growing your business. Ignoring social media is a mistake for any business that earns revenue from customers, has competitors, or isn’t the Kleenex of your category.  If you’re questioning whether your business should engage in social media, consider these three questions:

1. Is your business built on relationships?
2. Do you have competitors?
3. Does everybody you want to do business with already know your name?

Report: U.S. taxes overly confusing – There may be no surprise that the federal income tax is confusing but a new report done at President Obama’s request is detailing just how confusing and contradictory it is.

3% or 48%?

Obama Proposes Tax Breaks for Business: Too Little, Too Late? – Where were you on December 1, 2007? It’s one of those dates that you’re likely not to remember. But according to the National Bureau of Economic Research, that’s about when the recession really started. If you believe that we’re still in a recession (and most economists seem to), that makes 34 months.

How to cut down your own business costs by hiring virtual assistants -

Snubbed Again! And a Sincere Apology – I don’t get it. I didn’t make Accounting Today’s top 100 most influential people a-g-a-i-n. I mean, they don’t appear to think that my stay home tax practice or my quirky blog posts are influential enough to name. But I guess I should have been tipped off when I wasn’t contacted to supply a cute pic or provide a snappy bio.

E*Trade Online Brokerage Account Review

Tax Relief FAQ: What Should a Business Owner Do In Regards to Delinquent Payroll Deposits or Past Due Employment Taxes? – The best thing you can do is to stay current on your employment taxes from this point forward and seek immediate tax help.

Life Insurance

Online Payment Agreement – You don’t need a tax lawyer if you owe the federal government (IRS) $25,000 or less in income tax, penalties and interest. Instead, you can access an online payment agreement.

Are Your Tax Dollars Supporting the Ghostbusters?

H&R Block Records Lower Losses – The nation’s largest tax preparer, H&R Block Inc. reported lower losses by 2% for its first quarter in the fiscal year ended July 31, 2010. In the midst of a flurry of cost cutting measures, the Kansas City, Missouri based tax preparer posted a net loss of $130.7 million.

QuickBooks billing tips, tricks, workarounds – Tracking client retainers

EA, CPA or Tax Attorney?

Expert Tax Help FAQ: Can the IRS Get Personal When It Comes to Payroll Taxes? – The sure answer is “YES”

What your IRA can learn about paying tax from Cornell University

If At First It Doesn’t Work, Try, Try, Try Again – Not much is worse than a failed attempt at a resolving a problem being offered as a solution to the very problem it failed to resolve. True, one ought not give up after one unsuccessful try, but is there not some limit to the pursuit of futility?

Financial Mistakes You’d Make All Over Again – My favorite post this week.

SOME FACTS AND FIGURES ABOUT THE FEDERAL TAX SYSTEM – Here are some interesting facts and figures concerning our current tax system that were included in the “Report on Tax Reform Options” recently issued by the President’s Economic Recovery Advisory Board

The Strangest Tax Write-Offs…Ever!

A “PTIN Facebook” for registered tax preparers? – As part of the new preparer registration process, the IRS should make it easy for taxpayers to confirm the identity and PTIN registration credentials of their tax preparers.

Should taxpayers be enforcing the new preparer regulations?

Surviving Spouse IRA Trap

When you hear people say things like “I’m in the 35% income tax bracket,” what are they really saying? Are they truly paying out 35 cents on every dollar they earn just in federal income tax? And what do people mean by the “marriage penalty?” When you’re looking at how to calculate income tax, it’s important to remember that we have several tax brackets in the U.S. Here’s how they break down How to Calculate Federal Income Tax.

IRS Patrol: New Form 8941 -IRS Releases Form to Help Small Businesses Claim New Health Care Tax Credit

Now is the Time to Use an Income Tax Estimator – This is the time to calculate what you’re going to owe and make adjustments in your payroll withholding and estimated tax payments. You know you’ve estimated right when you don’t pay much or get much back in a refund.

How Do You React to Financial Emergencies?

Get ready for FSA changes: IRS issues regs for 2011 OTC drug reimbursements – If you have a flexible spending account, or plan to sign up for one in the workplace benefits enrollment season that will soon be here, remember that medical flexible spending accounts face a change in 2011.

Two or More States

Posted by Bruce Mc on Jul 6, 2010 in Information, State/s, Tax Preparation | 2 comments

If you work in two different states, you will file a tax return in both the states. One state is your Home Tax State with the other state being where you were/are a  part year resident. Or as I get a lot of  here in Kansas City, You live in one state and work in another. In some cases, you may have even more states.  

 Last year I had a client (new) that lived in one state and worked in five states.   

(Interestingly enough that particular client had one W-2 and the employer withheld for all five states – Self-filers, would you know how to work that out?)

In the state that is not your tax home, you are part year resident or a non-resident; you report income you earned while in that state, to that state. If you have received only one W-2 from your employer, then use simple arithmetic based on number of days spent in the state to figure out the income that you should report to that state.   

(Of course, that in itself brings up a really interesting taxing issue. You paid your home state taxes that should have gone to the other.)

• Colorado - 4.63% 
• Illinois – 3% 
• Indiana – 3.4% 
• Massachusetts – 5.3% 
• Michigan – 4.35% 
• Pennsylvania - 3.07% 
• Utah – 5%. 

(The above rates may have changed) 

 Moving After Retirement 

If you are getting retirement benefits and you move/d from a state with no income tax to a state with income tax, then you must pay state income tax even on your retirement benefits.

 Non-resident Aliens and Exempt Individuals  

States define tax residence differently than the IRS does at the federal level. At the state level, there are generally three types of people:   

• Residents,
• Part-year residents and
• Non-residents

The determination of residence tends to be based on the time of year an individual moved into or out of a state, or if they lived there all year. It is entirely possible that a non-resident alien is considered a resident for tax purposes at the state level several years before they are considered a resident for federal tax purposes.   

Some states honor the federal tax treaty benefits. States the do not honor federal treaty benefits are Alabama, Arkansas, California, Connecticut, Hawaii, Kansas, Kentucky, Mississippi, New Jersey, North Dakota and Pennsylvania.  

It has been my experiences that if a taxpayer has a tax year where they need to file in more than one state, it is best if you visit with a tax professional to be sure you have all the information you need to file all the returns correctly. Of course, I recommend that any tax payer filing their own return visit with a tax professional to talk over their situation. Your situation might not have changed but the rules almost assuredly have.